3/26/2011

The Absurdity of Intellectual Property and Anti-Trust

The fiction we are all taught in grade school is that without the government giant evil monopolies would emerge that would exploit the consumer and rule with an iron fist. The reality is there has never been one example of a free-market created monopoly in the history of mankind. Appallingly, alleged examples of "free-market" monopolies, such as Standard Oil, are actually companies that achieved their monopolistic position through government assistance, and then maintained it by government regulations and interventions into the marketplace stifling competition.

Proceeding as such, eventually it was decided the government needed to prevent monopolies from emerging and thus formed the Anti-Trust division. This arm of the government has never been used for anything other than to benefit 2nd or 3rd place companies whom were unable to match the success of the current industry leader through natural free market methods (I.e. improving quality of product and/or lowering price) and instead turned to the Anti-Trust department to dismantle the company that has met the consumer's needs most efficiently instead. One of the most famous examples of this was the non-monopoly of Microsoft which was accused of the non-crime of giving away their product for free by rivals whom were unable to compete.

A new business is taking the business world by storm by the name of Groupon. They have skyrocketed to a rumored 25 billion dollar valuation in under 3 years. Their idea is essentially offering discounts for products and services where demand is typically below average. Meals at restaurants during non-peak hours etc. Their biggest obstacle right now is that their idea is extremely easy to copy. Already there are several competitors that have sprouted up. To combat this they are in process of applying for a patent for their idea. Their idea being offering coupons to use services. In order to prevent a monopoly from occurring, multiple competitors have sprung up. The only way they can make money is to please the consumer. The race to the top of the profit charts is simultaneously a race to please the consumer the most efficiently. In order to prevent this process Groupon turns to the State patent office. Can we please patent the idea of offering coupons in this unique way so that others cannot?

The justification for Intellectual Property and Anti-Trust relies on a fiction that is exactly opposite from reality.